There’s no denying to the fact that organised retailing in India has undergone remarkable growth in last decade owing to favourable demographics, growing consumer aspirations and brand consciousness. Out of all the categories, the Indian fashion consumption story, the second largest contributor to the retail industry after food and grocery, has undergone a profound transformation.
Country’s sizeable young adult consumer base, rising disposable income, growth in the middle-income segment and entry of international brands has made India a highly lucrative market. But in the era of ‘fast-fashion’ retail, there is still a huge gap between India’s organised and unorganised retail, especially in the fashion segment.
For instance, India’s US $70 billion fashion retail market is still mostly unorganised, with nearly 93 percent of it happening through small mom-and-pop stores or stand-alone outlets. The shift to organised large-format chains has been on in the last decade, but only at a snail’s pace. But that’s changing now.
One such company that is working tirelessly to bridge this fashion retail gap, especially in the smaller cities and towns is Delhi-based Citykart Retail (SSR Retail Kart Pvt. Ltd). Helmed by Sudhanshu Agarwal, the company’s Founder and Chief Executive, Citykart retail is slowly yet gradually organising India’s unorganised fashion retail, one city at a time.
Making Fashion Accessible
Unlike many large retailers who focus heavily on grocery, Citykart retail focuses on family fashion retail through its affordable and value for money products addressing all age group. About 80-85 percent of company’s revenue comes from apparel. And it’s primary TG is the lower middle class, who resides in Tier II and III cities and smaller towns in Uttar Pradesh, Bihar, Jharkhand, Odisha, West Bengal and NorthEast.
“A shift towards organised retail, improved business models, changing demographics, and rising per capita income has cemented our trust in serving this TG and geography. Even after being the most populous part of the country, Tier II and III cities and towns are highly under-penetrated in terms of organised retail. Basically, these are the places where people have newly increased purchasing power and aspire for a shopping experience,” feels Sudhanshu Agarwal.
“At CityKart, we have witnessed a definite shift of consumers from unorganised to organised retail, and we are confident about serving this segment,” he adds.
With an average store size of 8,000-10,000 sq. ft., the company currently operates 26 stores and sells clothes, accessories and footwear for men, women and children.
Robust Business Model
In addition to catering to the under-tapped retail consumers, Citykart is increasing their profits by optimising and chasing the right business model.
Over the last few years, Citykart has retooled their business models after a decade of learning, instead of reckless expansion. With an increased focus on improving store economics, the company has found its strength in its deft Inventory Management. The company has also invested in best-in-class Management Information System (MIS) that keeps a rigorous control over stock and highlights the critical areas related to sales and stock numbers.
This increased focus on perfecting the technology and business has even led to the company’s continuous growth. The company is growing at a CAGR (compound annual growth rate) of 30-40 percent and closed its last financial year with a turnover of around Rs 200 crore. With an expectation to grow by 50 percent in the current fiscal year, the company is envisaging 12 new stores this year.
